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P10-1A On January 1, 2015, the ledger of Accardo Company contains the following liability accounts.
Accounts Payable $52,000
Sales Taxes Payable 7,700
Unearned Service Revenue 16,000
During January, the following selected transactions occurred.
Jan. 5 Sold merchandise for cash totaling $20,520, which includes 8% sales taxes.
12 Performed services for customers who had made advance payments of $10,000. (Credit Service Revenue.)
14Paid state revenue department for sales taxes collected in December 2014 ($7,700).
20Sold 900 units of a new product on credit at $50 per unit, plus 8% sales tax.
21Borrowed $27,000 from Girard Bank on a 3-month, 8%, $27,000 note.
25Sold merchandise for cash totaling $12,420, which includes 8% sales taxes.
Instructions
a) Journalize the January transactions.
b) Journalize the adjusting entry at January 31 for the outstanding note payable. (Hint: Use one-third of a month for the Girard Bank note.)
c) Prepare the current liabilities section of the balance sheet at January 31, 2015. Assume no change in accounts payable.
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